Raytech Corporation Announces Personal Injury Trust's Settlement with Environmental Creditors and Trust's Intent to Effect a Ray

Raytech Corporation (NYSE trading symbol RAY) announced
today that it has been informed by The Raytech Corporation Asbestos
Personal Injury Trust ("Trust"), its largest shareholder, that the
Trust has signed a Supplemental Settlement Agreement with the U.S.
Environmental Protection Agency, the Connecticut Department of
Environmental Protection and FMC Corporation, shareholders who were
the environmental creditors of Raytech in its 2001 Chapter 11
reorganization ("Environmental Creditors"). Raytech also announced
that it has been notified that the Trust intends to undertake a going
private transaction of Raytech.
   The agreement, which supplements 2000 and 2001 agreements between
the Trust and the Environmental Creditors, calls for the Environmental
Creditors to sell to the Trust a total of 3,228,888 shares of common
stock of Raytech (or approximately 7.7% of the outstanding shares).
The Environmental Creditors will also assign to the Trust their claims
to certain assets of the bankruptcy estates of Raymark Industries,
Inc., Raymark Corporation and Universal Friction Composites, formerly
related companies of Raytech, including their rights to recovery under
an insurance claim, and rights in Raytech tax benefits currently owned
by the Environmental Creditors pursuant to Raytech's reorganization in
2001. The Trust will pay an aggregate cash purchase price of
$9,457,777 for the stock and the assignments. Upon completion of the
settlement, the Trust will own approximately 90.6% of the outstanding
shares of Raytech. Completion of the settlement is conditioned upon
receiving the approval of the United States Bankruptcy Court for the
District of Connecticut. Raytech is not a party to the agreement.
   After completing the stock purchase, the Trust intends to
undertake a short-form merger of Raytech into a newly created
subsidiary wholly owned by the Trust. The Trust expects to indirectly
acquire of all of the outstanding shares of Raytech common stock in
the merger in consideration for a cash payment of $1.32 per share for
each share held by the unaffiliated public stockholders of Raytech.
This price equals the closing sale price per share of the Raytech
common stock on July 6, 2005.
   After the short-form merger, the Trust intends to seek to de-list
the Raytech common stock from trading on the New York Stock Exchange,
and to terminate the registration of the stock with the Securities and
Exchange Commission.

   About Raytech Corporation

   Raytech Corporation is a worldwide manufacturer of wet and dry
clutch, power transmission and brake systems as well as specialty
engineered polymer matrix composite products and related services for
vehicular applications, including automotive OEM, heavy-duty
on-and-off highway vehicles and aftermarket vehicular power
transmission systems. Through two technology and research centers and
five manufacturing operations worldwide, Raytech develops and delivers
energy absorption, power transmission and custom-engineered components
focusing on niche applications where its expertise and technological
excellence provide a competitive edge.
   Raytech Corporation, headquartered in Shelton, Connecticut,
operates manufacturing facilities in the United States, Germany and
China as well as technology and research centers in Indiana and
Germany. Its operations are strategically situated in close proximity
to major customers and within easy reach of geographical areas with
demonstrated growth potential.
   Raytech's common stock is listed on the New York Stock Exchange
and trades under the symbol "RAY." Additional information about
Raytech may be accessed on its website http://www.raytech.com.

   About Raytech Corporation Asbestos Personal Injury Trust

   The Trust is the largest shareholder of Raytech Corporation. The
Trust was formed as an irrevocable trust with the approval of the
United States Bankruptcy Court. The Trust's purpose is to use its
assets and income to make payments to people who were allegedly
injured due to exposure to products containing asbestos sold by
Raytech. At the time of Raytech's reorganization, a channeling
injunction was entered by the Bankruptcy Court that permanently and
forever stays, enjoins and restrains any asbestos-related claims
against Raytech and its subsidiaries. Under the Bankruptcy Code, all
future asbestos related claims are to be channeled to the Trust for
resolution.

   From time to time, information provided by Raytech Corporation,
statements made by its employees, or information included in its
filings with the Securities and Exchange Commission may contain
statements which are so-called ``forward-looking statements'' and not
historical facts. Forward-looking statements can be identified by the
use of words such as ``believe,'' ``expect,'' ``intend,''
``anticipate,'' ``in my opinion,'' and similar words or variations.
These forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Raytech's actual future results may differ significantly from those
stated in any forward-looking statements. Forward-looking statements
involve a number of risks and uncertainties, including (without
limitation) product demand, pricing, market acceptance, litigation,
risks in product and technology development, and other risk factors
detailed from time to time in Raytech's Securities and Exchange
Commission reports (including its Forms 10-K and 10-Q).